Employers Evaluating Health Benefits Strategies

May 15, 2013 (PLANSPONSOR.com) - Employers are highly concerned about the cost implications of the Affordable Care Act (ACA) to their organizations, new research finds.

Yet, almost all employers participating in roundtables held by professional services firm PwC are considering continuing to “play” by providing some level of health coverage, at least to most of the workforce.

A related survey found 41% of employers are concerned about an increase in company cost, and one-quarter are concerned about the 40% excise tax on high cost coverage. Fourteen percent of respondents are concerned about their ability to provide current benefits or any benefits at all, and 14% indicated concerns about compliance and reporting requirements. The ability to avoid penalties (4%) and providing benefits to employees who are currently not eligible (2%) were other selected issues.

According to the roundtable discussions, some employers have looked at different ways to play, for example, by providing different benefits or contribution levels for different employee groups. However, absent some needed guidance about nondiscrimination rules, it is difficult for them to move forward, and options for replacing employer-sponsored coverage and paying penalties are still too immature for most employers to seriously consider for their active employee population.

Most roundtable participants had not yet considered potentially leveraging public exchanges and paying a penalty to enable employees more affordable options, but were intrigued with the idea. This approach made more sense for companies with more part-time or seasonal and/or low-wage workers. Employers with more stable and higher paid workforces were less interested in this approach.